[Metrobeans]

B434 Tax Interest Parity Bill 2012, TSR Libertarian Party

Tax Interest Parity Act 2012

An Act stopping businesses and self-employed losing interest payments due to being overcharged by HM Revenue and Customs.

BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:-

Part I: Interest Rates
1 Interest On Tax
(1) The interest rates for all money either owed to, or owed by Her Majesty's Revenue and Customs is the same as the Bank of England official bank rate.

Part II: Miscellaneous
2 Short Title
(1) This act may be cited at the Fair Interest Act 2012

Notes

Currently HM Revenue and Customs have control over the levels of interest payable on tax both by those owing them money, and money they owe businesses and the self-employed as over-charge separately. This can lead to grossly unfair situations such as the following:

http://www.timesonline.co.uk/tol/mon...cle5561148.ece

Businesses and the self-employed thus lose their own interest payments due to being overcharged by HR Revenue & Customs, with no compensation, effectively creating a tax emposes unchecked by the Revenue. The opposite situation involves them paying interest to the Revenue. The bill seeks to adress this imbalance.

[JPKC]

Initial aye, though do you have any idea what the reduction in revenue would be?

[tehFrance]

Does this mean I pay less interest? if so, sign me up

[TopHat]

That link does not work properly.

[barnetlad]

HMRC should only be allowed to charge interest if it is calculated in old money and they give change in groats.

[tehFrance]

(Original post by TopHat)
That link does not work properly.

This is the link, you need a sub though.

[Birchington]

Anything that forces the HMRC to be more efficient should be welcomed. Aye.

[Keckers]

(Original post by JPKC)
Initial aye, though do you have any idea what the reduction in revenue would be?

You value the loss of revenue to be a more important factor than the impact upon the individuals who have been unfortunate enough to be on the receiving end of a tax return error?

[Rakas21]

I'd like it costed so we know how much this measure will cost but i will likely vote Aye.

[CyclopsRock]

I think this is one small, but important step, in rebalancing the relationship relationship between the state and the individual.

[thunder_chunky]

Seems reasonable I suppose

[JPKC]

(Original post by Keckers)
You value the loss of revenue to be a more important factor than the impact upon the individuals who have been unfortunate enough to be on the receiving end of a tax return error?

Yes. If there is too radical a change in revenue then I'll vote against. The Bill doesn't exactly phase in the proposals.

What would the difference in revenue be for correcting this minor anomaly?

[jesusandtequila]

It's almost impossible to find costing on this since HMRC does not keep records on the length of time taken to repay overpayments, or on underpayment, or the amount. It simply isn't important enough.

However, considering that in our Tax Act last term we provided for a £1.2bn increase in revenue as a lower bound estimate, with scope for more from the further growth from lower rates, and around £3bn from the changes in the Narcotics Act as well as savings from the Sex Act (by bringing prostitution into the formal sector) - we feel that this can comfortably adjust this with no overall loss to revenue from our Bills.

Furthermore, I think it somewhat misses the point to ask of revenue losses. This is revenue raised currently by a very unfair process. Is it right that HMRC should be raising revenue from charging disparate interest rates on the mistakes people make, and the mistakes HMRC makes? Why should individuals be punished to a degree seven times that of the state? Furthermore, this merely incentivises HMRC to delay any repayment of tax, since they are paying virtually no interest on it.

Okay - so for a second reading I'd like to increase the rate for both under and overpaid tax such that delays aren't incentivised on either side, but the principle of parity shall remain.

[MacDaddi]

(Original post by jesusandtequila)
It's almost impossible to find costing on this since HMRC does not keep records on the length of time taken to repay overpayments, or on underpayment, or the amount. It simply isn't important enough.

However, considering that in our Tax Act last term we provided for a £1.2bn increase in revenue as a lower bound estimate, with scope for more from the further growth from lower rates, and around £3bn from the changes in the Narcotics Act as well as savings from the Sex Act (by bringing prostitution into the formal sector) - we feel that this can comfortably adjust this with no overall loss to revenue from our Bills.

Furthermore, I think it somewhat misses the point to ask of revenue losses. This is revenue raised currently by a very unfair process. Is it right that HMRC should be raising revenue from charging disparate interest rates on the mistakes people make, and the mistakes HMRC makes? Why should individuals be punished to a degree seven times that of the state? Furthermore, this merely incentivises HMRC to delay any repayment of tax, since they are paying virtually no interest on it.

Okay - so for a second reading I'd like to increase the rate for both under and overpaid tax such that delays aren't incentivised on either side, but the principle of parity shall remain.

Hear, hear!

[CyclopsRock]

They actually pay NO interest currently on overpayments. The current rate for late payments to HMRC is BoE base rate + 2%. For overpayment it's base rate - 0.5%. Given that the current base rate is 0.5%....

[RoryS]

More efficiency is good, aye.

[gmseahorse]

Sounds alright, aye.

[Jarred]

Seems like a good move.
Aye.

[cl_steele]

should be alright, aye.

[toronto353]

Seems sensible enough. Aye and well done to the Libers for a great Bill.